The Contrary Investing Report
Investing and Trading News, with a Contrarian, Sarcastic Twist!


Chinese Stocks Continue to Look Weak

by Brett on April 28, 2010

We’ve been watching Chinese stocks very closely for almost a year now, because the last time the markets all tanked, China led the way.

Since retracing a standard fare Fibonacci amount of their previous losses, Chinese stocks actually put in a top last August, and since have been making an ominous set of “lower highs” – a traditional bearish indicator.

Chinese stocks

The Chinese stock market rally has stalled. (Chart courtesy of StockCharts.com)

Legendary trader Dennis Gartman commented a few months ago that he was concerned that stocks markets around the world had rallied furiously back to “the box”, then stalled – with “the box” being the aforementioned usual 38-62% retracement of previous losses.

(I’ve never heard a suitable explanation as to why this always happens, other than “it just does”.  Which is fair I guess, because it usually does happen.)

It sure looks ominous across the Pacific right now.

You may also enjoy: More reasons the Chinese bubble is bursting.


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